Microsoft now calls OpenAI a competitor in AI and search

On By Vaseline

Microsoft has a long and complicated history with OpenAI, reportedly investing $13 billion in the ChatGPT maker as part of a long-term partnership. As part of the deal, Microsoft will run OpenAI’s models on its enterprise and consumer products, and will be OpenAI’s exclusive cloud provider.

However, the tech giant called the startup a “competitor” for the first time in an SEC filing on Tuesday.

In Microsoft’s annual 10K, OpenAI joined a long list of AI competitors, alongside Anthropic, Amazon, and Meta. OpenAI was also named alongside Google as a Microsoft search competitor, thanks to OpenAI’s new SearchGPT feature announced last week.

It’s possible that Microsoft is attempting to change the narrative about its relationship with OpenAI in light of antitrust concerns — the FTC is currently investigating the relationship, along with similar investments by cloud providers in AI startups. Microsoft recently agreed to give up its observer seat on the startup’s board of directors — a seat it won after a row last fall in which OpenAI’s board briefly fired CEO Sam Altman, prompting Microsoft CEO Satya Nadella to offer him and other top executives jobs at Microsoft.

However, SEC documents like these are often a source of extremely cautious warnings to investors.

Partners and competitors are certainly not mutually exclusive titles in Silicon Valley. In 2000, the dominant search engine at the time, Yahoo, announced an agreement to have Google’s search results appear on its web page. The two companies were partners for a few years, until Google ate Yahoo’s lunch in search and became the unofficial, but dominant, doorstep to the Internet. The two companies were partners, but still posed a threat to each other. (Yahoo owns TechCrunch.)

There’s already enough history of these kinds of switches in technology, so it’s conceivable that the relationship between Microsoft and OpenAI will take a similar turn.

In any case, Microsoft isn’t putting all its eggs in one basket.

In March, Microsoft hired billion-dollar AI startup co-founders Mustafa Suleyman and Karén Simonyan of Inflection AI to lead its new Microsoft AI division. The cloud provider is investing heavily in Microsoft Copilot and building an AI future entirely separate from OpenAI.